Chair's Message

Philip N. Diehl

The Story Behind the American Eagle Platinum Bullion Coin

Before I tell the story of how our nation’s first platinum coin was born, I have a request to make of our members. Every year, February rolls around and a significant number of ICTA members let their memberships lapse. True to form, the same has occurred this year.

If you are a lapsed member, I urge you to pay your 2018 dues, today. ICTA is working hard to defend and expand state sales-tax exemptions in more states than ever before—and we’re succeeding. We’re also fighting battles in state legislatures to prevent unreasonable regulation of our business. California and Minnesota are recent examples. Again, we’re winning these battles. In Washington, D.C., we’re opposing attempts in Congress to allow states to collect sales taxes on our interstate sales. So far, so good, but it’s a battle every year. And with our Anti-Counterfeiting Task Force, ICTA is taking on the greatest challenge we’ve ever tackled—and we’re having a big impact. I’ll bring you up-to-date on that front in the near future.

These initiatives are all crucial to the health of our business. But ICTA cannot sustain them unless you step up, renew your membership, and urge others who are not members to join. Please act, today.

Now, moving on to my Platinum Eagle story. ICTA will soon announce the date of a special online auction hosted by Heritage Auctions. We expect this event, and others to follow, to be a major source of funding for the Anti-Counterfeiting Task Force (ACTF). Please consider donating a coin to the ACTF auction. If you have a business, the donation is deductible as a business expense. If you’re giving as an individual, ICTA has created a charitable foundation that allows you to make a tax-deductible donation. For details, click here. Thank you, Heritage!

One of the coins you’ll find in the ACTF auction is a one-ounce 1997 PR70 Ultra Cameo American Eagle Platinum Bullion Coin—1997 being the inaugural year of America’s first platinum coin. The Ultra Cameo is the highest level of cameo contrast in a proof coin. Collectors love a good story to accompany coins in their collections, and the Platinum Eagle has a great story behind it.

American Eagle Platinum One Ounce Proof CoinCongress authorized minting the Platinum Eagle in late 1996, two and a half years into my term as Mint director. During those years, we launched major initiatives to bring order out of the chaos of the Mint’s financial system, improve customer service, rationalize the Mint’s management structure, resolve long-standing labor-management conflicts, professionalize the U.S. Mint Police force, and modernize the Mint’s production processes and IT systems.

We were building a Mint with new capabilities, and we were anxious to test our ability to bring new products to market and compete with the most entrepreneurial mints in the world. Our flagship product, the American Eagle Gold Bullion Coin, was not the product to demonstrate our capabilities. By law, the Gold Eagle is 91.67 percent gold. The world standard for gold bullion coins is 99.95 percent. There were good reasons for not changing the fineness of the Gold Eagle, so we would need to create a new coin.

Every coin produced by the Mint must be authorized by an act of Congress, so if we wanted to create a new product we’d have to go through Congress. Fortunately, I found a partner in the effort, Jacques Luben, executive director of the Platinum Guild International. I had come to the conclusion that the right product for our purposes was a platinum bullion coin. If Jacques and I could persuade Congress to grant the Mint broad discretion in creating the coin, we could design it from scratch to appeal to investors in the world’s two largest platinum markets, the United States and Japan. Together, we asked Representative Michael Castle (R-Del) to carry the legislation.

The law Rep. Castle succeeded in passing is, to my knowledge, unique in the nation’s history. In 31 U.S. Code Section 5112, you will find that—with the exception of the Platinum Eagle—Congress has mandated, in agonizing detail, paragraph after paragraph after paragraph, virtually every specification and feature of every coin ever produced by the US Mint. I wanted to avoid this straitjacket for the Platinum Eagle, so I drafted Rep. Castle’s bill to allow us to design the new coin based on the market research we would conduct after Congress authorized the coin.

In contrast to every other coin in U.S. history, Congress gave the Mint extraordinary discretion in designing the Platinum Eagle. The law reads:

“The [Treasury] Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.”

That’s it—37 words.

In contrast, Congress’ authorization of the Gold Eagle consists of almost 700 words, specifying…

  • the obverse and reverse designs;
  • the denominations and their face values;
  • the diameter and weight of those denominations;
  • the reeded edge;
  • the fineness of gold;
  • the mintage (“sufficient to meet public demand”)
  • all inscriptions (“Liberty,” “In God We Trust,” “E Pluribus Unum,” “United States of America”); and
  • how the coin is to be marketed, priced, and discounted.

The only requirements Congress mandated for the platinum coin were that it be (1) a coin and (2) minted in platinum. In fact, the law doesn’t even require the Mint to produce the coin. The operative words are “may mint” (emphasis mine). If our research determined that bringing a platinum coin to market was a dubious proposition, we weren’t required to do it.

Our marketing director, David Pickens, and I used this extraordinary degree of discretion to the fullest. We consulted closely on specifications and design with our marketing partners in the United States and Japan, and chose a striking depiction of the Statue of Liberty for the obverse of the coin. We avoided controversy by adopting the conventional inscriptions on U.S. coins. We adopted the world standard for platinum bullion coins—.9995 fine. We took advantage of the design flexibility allowed by Congress to make the proof version of the Platinum Eagle the only U.S. coin to have a yearly alternating design on the reverse.

The Royal Canadian Mint’s Platinum Maple Leaf owned the world market for platinum bullion coins when we issued the Platinum Eagle in 1997. Within eight months, the Eagle had claimed a 75 percent market share, dominating both U.S. and Japanese markets. In 1998, its first full year of sales, the Platinum Eagle outsold the Platinum Maple Leaf by almost 13 to 1, and two years later, the RCM ceased production of the Maple Leaf.

Having proven our ability to analyze markets, design and produce coins that met consumer demands, and successfully market a new product, we laid the foundation for convincing Congress that we could undertake a massively larger program, the 50 States Quarters. Without the success of the Platinum Eagle there would have been no 50 State Quarters.

But that’s not the end of the Platinum Eagle story.

Sixteen years after Congress authorized the nation’s first platinum coin, its story took a dramatic and entirely unexpected turn. In January 2013, Congress, seeking leverage in a budget dispute with the Obama administration, refused to raise the federal debt limit, which would have prevented the government from paying its bills and caused the nation to default on its debts. Because the platinum-coin law sets no limit on the coin’s denomination, the Treasury Department could have defused the confrontation by minting a very high face-value coin, which would obviate the need to raise the debt limit. (How this is so is far too complicated to get into here.)

Public discussion of the coin, which was widespread in national media, fixated on a “trillion-dollar coin,” although coins with smaller, but still very large face values worked just as well. In the end, the debt-limit crisis was averted when Treasury and the Federal Reserve rejected the trillion-dollar coin idea and leaders in Congress agreed to raise the debt ceiling.

It’s quite a story, and in the upcoming ACTF auction, you’ll have the opportunity to purchase one of the first proof coins in the series. I’ll even autograph it for you.